|Posted by Joshua Lerch on June 18, 2011 at 9:35 PM|
Do you believe that the U.S. economy is steamrolling toward a depression? If so, you are not alone. According to a recent CNN poll, 48 percent of Americans believe that "another Great Depression" is likely within the next 12 months. Americans have been waiting for almost three years for a "recovery" to materialize, but instead there are all kinds of signs that the economy is about to get worse yet again. Inflation is rising but wages are not. There are millions of Americans that would do just about anything to get a decent job. The "misery index" is the highest it has been in almost 30 years. All of the recent polls show that the American people are more pessimistic about the economy than at any other time in recent memory. World financial markets are incredibly unstable right now and many analysts are expecting a repeat of 2008 (or worse). Meanwhile, our state and local governments are drowning in debt, the federal government is drowning in debt and governments all over Europe are drowning in debt. No, it is not crazy for 48 percent of Americans to believe that we are about to go into another Great Depression.
ust think about that statistic for a moment. Nearly half of the country expects the economy to fall to pieces at some point over the next year.So do I agree with them?
Yes, I certainly believe that an economic collapse is coming. But that doesn't mean that it will necessarily happen within the next year. The United States is in the midst of a long-term economic decline, and the next big financial crisis could potentially happen in 2011 or 2012.
But it might not.
There are so many variables and it is so hard to predict with certainty the exact timing of how things will play out.
However, it is true that incredibly painful economic times are coming. Our long-term economic future looks unbelievably bleak.
So anyone that believes that we are headed for another depression is certainly not crazy. The following are 19 reasons why it is perfectly rational to be pessimistic about the U.S. economy right now....
#1 Today, 25 million Americans are either unemployed or underemployed. 6 million of those have been out of work for at least 6 months. The average duration of unemployment in the U.S. is now close to 40 weeks.
#2 The unofficial misery index, which is calculated by combining unemployment and inflation, is now at a 28 year high.
#3 Sadly, if unemployment and inflation were calculated the same way that they were back in the 1970s, the misery index would actually be much, much higher. According to John Williams of Shadow Government Statistics, the current "real" rate of inflation is approximately 11.2% instead of the 3.6% figure that the U.S. government wants us to believe.
#4 Greece is on the verge of complete and total financial collapse. The yield on two year Greek bonds is up to 28 percent. The European Central Bank and the German government have been fighting over what to do to solve the Greek crisis. The truth is that without a bailout the Greek government will default. If Greece defaults, it would be a huge nightmare for world financial markets.
#5 Neil MacKinnon, an analyst at VTB Capital, is warning that a Greek implosion could set off a 2008-style financial crisis....
"The risk of a 'Lehman moment' for the eurozone is increasing"
Categories: Economic News